Founder & CEO, Sherpaa

Why Big Health Insurance Supports the Democrats

Some very interesting insight here…

“DrRich’s theory, first formulated six months ago, provides the answer. In the evolution of their managed care products, health insurers finally have reached the point where they need to demonstrate their ability to grow their profits by actually managing the medical care of sick people. The notion that they can do so is, of course, absurd. Furthermore, the notion that the Republicans would be relying on the insurers not only to make a profit, but also to reduce the cost of American healthcare at the same time, literally scares the bejeebers out of insurance executives. The very last thing Wellpoint and UnitedHealth Group want is for McCain to win the presidency, then turn to them and say, “OK boys, do your cost-reducing stuff!” A Republican victory would suddenly reveal the insurers to be entirely bankrupt of useful ideas, and would expose them to a sudden, ugly, stock-tanking demise."

"Democrats will also put the industry in an untenable position, of course, and will at least arguably aim to drive them out of business (though without actually telling us so). But Democrats actually have no expectations for the insurance industry, other than that they fail in due time. This, DrRich submits, is the insurance industy’s plan, too.

But before they drive them into oblivion, the Democrats promise to create for them one last, massive windfall – namely, the government-paid insurance premiums for many of the 47 million uninsured Americans. (Joseph Paduda at Managed Care Matters thoughtfully estimates for us that windfall as $150 billion per annum – not exactly chicken feed.)

So, for at least a while, under Hillary’s plan the insurance industry profits will rise, stock prices will rise, and executive bonuses will rise. This is as good as it’s going to get.

In 1994 the insurance industry (then early supporters as well) took a look at Hillary’s massive plan for healthcare reform, and said, “My God! We’ll be out of business in 5 years!” And they became intractable enemies of her reform plan.

Today, they look at their situation and say, “My God! We’ll be out of business in 5 years!” And they see in Hillary a means to engineer those 5 years into one hell of an exit strategy."